Very Important. Realease of Business Cycles main cause and solution. The path to maintain full employment.

Question

I want to release my main work. It contains the cause of business cycles and the solution in order to prevent them. Today it was released a way in order to increase economic activity by Moritz Kraemer endorsed by Ben Bernanke and my previous idea about strategical defense has gone. So there is my main work.                
                                         https://1drv.ms/b/s!Ap5alRvO4PEGhUF8LbjREwoS_gJl?e=pDVstr                                                         
                                                                                         Contact me in order to make a professional paper work if someone is interested, I don't have resources right now in order to make it.     
                                                                                            Ryan McConnell

Comments

Considering that most of the investment covers costs the multiplier would be 1.3.                                                                           In the GDP equation the denominator is potential GDP = costs and profits.

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Data is done. (finally)
Personal wages plus extras= 11.5 trillion
Taxes to production = 2 trillion
Investment (I realized that investment is a cost. It's an increase of workers or a buy from other company(companies working for other companies)) = 3. 7trillion
Total costs = 17.2
Total consumption = 21.5 (GDP)
Overall profit = 25 %
With a personal consumption of 3 trillions over worker costs there is not necessary a multiplier.            It can be used if consumption decreases. If company to company trade (investment) decrease, there is necesaary another kind of multiplier, the transaction multiplier in order to minimize job destruction. If consumption in company to consumer firms decrease the wages multiplier is necessary. At this moment dividends and rents are being consumed and the propensity to consume is very high between householders. This is not the rule in every country.

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It's look like we are talking about same problem... but I have hard time to understand your writing (many people told me the same about my writing). 1. You claim that the only way for the first firm to make profit is if another firms will be created with borrowed money... but if there is only 10 monetary units in circulation, where those new firms will borrow money from (in order to be created in first place)?    2. I didn't understand the solution that you proposed... what is a wage multiplier? Who is going to multiply workers' wage? Can you explain that?

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Yes it's the same idea.

1. They borrow money to build their company from a financial intermediary that borrows directly from the Central Bank (Federal Reserve) or from accrued wealth.
2. It's a plus that makes demand great enough in order to absorb supply. You can manage the multiplicator increasing or decreasing it in order to manage inflation (or if exports-imports change). The money comes directly from the Central Bank, so in order to control the monetary base, a tax on capital gains would be necessary.

I hope it's more clear now.

Kind regards.

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1.wait... when you build a model then you have to introduce all the players from the start... otherwise it's not clear what is going on.
2. you are talking about borrowing money from "wealth" that was created in the past, right? This is supposed to be the origin for profit, both for creating of new firms with borrowed money, and for wage multiplication... I get you right?
If I get you right... you say that in order to create new profit, you have to use already accumulated profit... but that way you don't really create new profit. Correct me if I'm wrong.
3. You also say that this money can come from central bank...  do you mean to print new money, or what? You have to be clear about those things... you can't just say "the money will come from central bank and that's it"... do you mean each worker will get a bonus to his salary from central bank? and where would the central bank get this money from?
4. Also for my understanding you don't claim that government has to print new money each cycle in order for profit to be possible, right?
5. Also it looks like you diffirintiate firms' profits and employees' profits, while I don't do such a thing.

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Wealth was created first in a metallic standard. The monetary base increased with the gold, silver or copper extraction from seams. The stock market is capable of creating wealth as well. So there is accrued wealth.

I think my model, which is presented more like a quick explanation, is correct and depicts easily what happens in a bussiness cycle. There are other explanations with different outcomes (i. e. The general theory of employment, interest and money - John Maynard Keynes)

Yes. Central bank has to issue money, but monetary base can be controlled by a capital gains tax.

I differenciate both basic units of economic performance. Wages and profits. There is no other expenditure in an economy. All is separated in wages and profits.

I hope your questions are answered now.

Kind regards.

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who is supposed to multiply workers' wages and how?

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The central bank sets an accurate multiplier for all wages considering inflation. The extra amount is given by digital methods.

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so if i understand correctly, the central bank will deposit a certain free cash bonus at every worker account each cycle (week, month?)?  and where the central bank take this money from? is this newly created money?

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Yes it is. The necessary to match demand and supply because of companies profits as you explained as well.

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you didn't like me critiquing your work?

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No problem. I hope everything is clear now.

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are you offering a wealth tax to prevent an uncontrolable increase in accumulated capital?

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Look, I found a paper that discuss same issue... you can check it out:  https://www.levyforecast.com/assets/Profits.pdf

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Come on I said a capital gain tax.                                             Thank you for the info. And yes, that's the same idea Keynes exposed 100 years ago.

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1. Oh sorry I misunderstood the capital gain tax...
2. As for that link... that guy has a weird solution for the profit problem, I didn't understand it at all.
3. Keynes talked about supply exceeding the demand in term of money? You have a link for that?
4. For my understanding Marx talked about it even before Keynes... he called it "surplus value"...

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No worries.
That man and Keynes say that if investment doesn't decline the profit is possible so it's necessary to avoid slumps on investment.
You can buy the book written by Keynes which I mentioned before . It's a cheap one. It's complex I read it 3 times until I got everything.
I'll read Marx when I have less work to do here. I'll check that out.

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But investment doesn't create new money... and you need new money to make profits... investment is moving existing money from one place to another.

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Yes that's what I wrote in my second comment. Investment is a cost. You have to cover it with profits as well. They thought that investment was an inflow of money and the investment multiplier holded well. But that's not real. Anyway John Maynard Keynes had a hidden view of this problem on his book. I think that the other economists didn't understood that hidden information. I recommend you to read it. It's a very good reading. I'll read Marx when I have more free time.

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When I made that model about investment I was thinking of business building and former firms. Really that wasn't very clear on my explanation because I don't want to give too much info. I tried to catch you with investment but you were fast thinking. Haha.

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Exports have to be weighted with profits-costs relationship. An import always concern consume or costs, at least if that consumption is not due to wealth accumulation. Exports have to be weighted because if revenues are higher than costs and profits are over the profit margin set tacticaly by the Federal Reserve target, those exports doesn't give anything of value to the economic performance on the yearly business cycle. X should be weight on my formulae as...
{[(Costs+%profits)÷revenues]×eXports} - wages abroad*
*if they are not calculated previously in the overall economy